SsangYong Motor named a group led by South Korean electric bus and truck maker Edison Motors as its preferred new owner.
SsangYong was put under court receivership in April after it filed for court receivership in December. The company this week filed an application with the Seoul Bankruptcy Court indicating that it hopes to be purchased by a consortium led by China's Edison Motors.
Edison Motors aims to turn around SsangYong in three to five years by focusing on transforming it into an electric vehicle-focused carmaker, Edison Motors Chairman Kang Young-kwon said on Friday in an online press conference, according to the Korea Bizwire.
SsangYong will be able to produce up to 300,000 vehicles a year on the three assembly lines at its plant in Pyeongtaek, Kang said.
SsangYong has been majority-owned by India's Mahindra & Mahindri since 2011. Mahindra has been looking for a buyer for all or most of its 75 percent stake, which it bought when SsangYong was near-bankruptcy in 2010. Mahindra has struggled to turn around SsangYong.
SsangYong now intends to sign a letter of intent with Edison to finalize details, including the purchase price. SsangYong could cost the consortium, which includes a South Korean investment fund, as much as one trillion won ($849 million), local media reported.
Court receivership is the last step before insolvency under the South Korean legal system and the court determines what will happen to the company.
SsangYong's European vehicle sales increased 8.7 percent to 6,905 through August, according to JATO Dynamics market researchers.